T20 Policy Brief on Digital Money

DIGITAL MONEY IS HERE: G20 (THINKING) MUST GO DIGITAL

Digitalization is driving financial innovations and developing money, credit, and banking models across the world. New players, such as major technological companies (Big Tech), are entering finance with ambitious plans. In aggregate, these processes will entail increased competition and potential financial stability risks. In the context of emerging digital money and Central Bank Digital Currencies (CBDCs), this paper analyzes general principles, rules, and basic recommendations by considering their regulatory and technological aspects. We urge the G20 to set up a Digital Money & Finance Working Group (WG) and develop a comprehensive agenda with a systemic vision, in line with the SDGs. This could guide a resilient financial system through a prudent transition process, keep pace with technology, and deliver the long-term benefits to society promised by innovation.